A European business lobby group on Monday urged the Japanese government to revise its coronavirus-triggered entry restrictions imposed on foreign nationals, warning that the ban threatens to leave a lasting negative impact on operations of European and Japanese businesses alike.

The entry restrictions were imposed about a year after a trade pact between Japan and the European Union came into effect on Feb. 1, 2019. The deal was meant to increase exports from the European Union and direct investment from Europe. Within a year, the agreement boosted exports from the EU by 6.6 percent.

“Now … (the agreement) is losing momentum because of the travel ban,” Michael Mroczek, President of the European Business Council in Japan, said during a news conference held at Foreign Correspondents’ Club of Japan in Tokyo.

He suggested that in easing the restrictions, Japan should prioritize permanent residents and long-term residents — noting that those groups include a large number of people who either run their own businesses or are employed in Japan — followed by business travelers.

To prevent further fallout, “a possible solution could be that permanent and long-term residents should be immediately let out and back again into Japan; in the second step the restriction could be lifted on business travelers and later … tourists.”

The entry restrictions, which were introduced to curtail the spread of the coronavirus on April 3 and subsequently updated through May 27, now cover 111 countries.

Last week, Prime Minister Shinzo Abe said Japan will start easing the restrictions around this summer, with priority given to business travelers.

But no European country has so far been included on the list of regions to be exempted from the restrictions in the first stage, as Japan has prioritized countries with stronger economic ties: Vietnam, Australia, New Zealand and Thailand.

“The impact (of Japan’s travel ban) on the European business here is that European companies with their Asia-Pacific headquarters in Japan are also losing competitiveness compared with Japanese companies,” he said, warning that some companies may move their headquarters outside of Japan.

Mroczek added that the restrictions may also jeopardize efforts by the Japan External Trade Organization (JETRO) to increase direct investment into Japan from abroad.

“Europe has been playing a very important role (in this effort),” he said, explaining that as of 2018, 49.5 percent of direct investment came from countries like the Netherlands, France, the U.K, Switzerland and Germany.

According to a recent survey conducted by the German Chamber of Commerce in Japan, 78 percent of German businesses in Japan have been impacted by the travel ban and of those, 39 percent have seen lost revenue. It added that 27 percent of the German companies impacted expect compensation for their losses from the Japanese government. Mroczek said the ban has hindered business relations for European executives based in Japan, raising questions among business operators about why Japan is allowing its own citizens to travel freely to regions hit hardest by the pandemic.

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